City adopts wheel tax at $25, effective with 2018 plate renewal

In a rare split vote on final reading -- quite possibly the first since the Greencastle City Council grew to seven members -- the Council has adopted a municipal motor vehicle license excise surtax and municipal wheel tax.

By a 4-2 vote with one abstention (with Councilors Stacie Langdon and Tyler Wade dissenting and Steve Fields abstaining), the Council adopted Ordinance 2017-6 on the second of two readings. It was adopted at the maximum rate of $25 per year in excise surtax on each vehicle (cars, motorcycles and trucks with a gross weight that does not exceed 11,000 pounds) registered in the city and $40 in wheel tax on vehicles (buses, RVs, semi-trailers, tractors, trailers and commercial box trucks) not exempt from wheel tax and registered within the city.

Adoption was necessary by Sept. 1 in order for the tax to be effective on Jan. 1, 2018.

Voting in favor of adopting the excise tax/wheel tax measure on second and final reading at the Council’s July meeting were Councilmen members Dave Murray, Gary Lemon, Adam Cohen and Mark Hammer.

Wade and Fields had voted in favor of the measure on first reading at the June session.

Langdon, the only one to vote against the measure in June, said she would not vote for $25 per vehicle per year “but would be open to less.”

Meanwhile, Wade, who asked constituents for comments via his Facebook page, suggested the $25 fee was “too much, too soon,” calling it a hardship for residents who struggle to make ends meet and to whom $25 can represent a big impact on their pocketbook.

Councilman Murray reminded the sparse City Hall audience and those watching at home on the cable access channel that the tax essentially amounts to 50 cents per week.

“It’s not an issue to me,” he said. “Gas prices are dropping (despite the recent state hike of 10 cents per gallon). Of course, if a year from now we have $3, $4 or $5 gas, we can revisit it.”

The Council did unanimously amend the ordinance to include an annual review of the tax.

Murray also reminded his colleagues that they have an obligation and a fiduciary responsibility “to make the city function as well as we can.”

While the tax is, in effect, a user fee for vehicle owners using city streets, Councilman Lemon reminded the group that the city needs funds to repair and maintain its streets and that the municipal tax is one tool the state has provided.

“The central point,” Councilman Lemon noted, “is do we need the money? ... If we don’t take the money today, we cannot recapture it.”

If that turns out wrong, however, the Council can always take the tax back to zero, he stressed.

Otherwise, as Councilman Cohen pointed out on efforts to keep up with road repairs, “we’re hamstrung on every side.”

An excise and wheel tax discussion was initiated near the end of the May Council meeting when it was noted that state statute now allows any community of more than 10,000 population to adopt its own wheel tax.

According to a Purdue University study of such a tax, Greencastle could raise an estimated $300,952 in additional annual revenue by piggybacking on the county wheel tax to add the additional $25 per vehicle tax (city resident families with one car or pickup would see a $25 hike, those with two vehicles a $50 bump and those with three a $75 increase over what they are currently paying for the county tax).

Noting that the Purdue figures were based on 2015 numbers, Mayor Bill Dory said at the June meeting that taking the maximum rate could generate an additional $404,000 for the city. The funds raised would have to be used exclusively on roads and streets.

Conversely, adopting the minimum rate would raise only $178,000, Dory said.

The city excise surtax tax and wheel tax would take effect Jan. 1, 2018 but city residents won’t experience its effects until they go to the license branch to renew their plates.